yugoslavias implosion

equipment. The military industry continued to operate at a profit
through the early 1980s while the rest of the Yugoslav economy
was in recession. Large arms exports—including exports to rogue
states 496—continued under Milošević following the break-up of the
country because several crucial plants, such as aircraft and tank production
facilities, were moved from Bosnia-Herzegovina to Serbia so
that their earnings could continue to fund the regime in Belgrade. 497
The hyperinflation of 1992–94, a major source of cash for
Milošević and his coterie, exemplified the plunderous nature of both
the war and the Milošević regime. It was set into motion primarily
by the theft of state foreign exchange reserves to finance the war
in Bosnia-Herzegovina and to support the rs and the rsk. A crucial
link in the financing of the war was the Federal Customs Office
(suc) under Mihalj Kertes, a loyal friend of Milošević. From 1994
until 2000, the financial arrangements for keeping the Army and the
Serbian mup supplied with equipment were worked out by Milošević
and senior Serbian officials Nikola Šainović, Milan Milutinović, and
Mihalj Kertes. Large sums were stashed away in off-shore hideouts
with the full cooperation of the Secret Service. 498
In addition to hitting hardest the weakest party to the conflict
(i.e., the Bosniaks), international sanctions and the un arms
embargo (imposed in September 1991 under un Resolution 713) created
a huge black market and hitherto undreamed-of possibilities
for individuals, especially those close to the regime, to amass fabulous
wealth. Many wanted the war to last as long as possible because
it was a source of enormous profit. The corrupt financial practices
496 Serbia’s and RS’s arms exports to Iraq and other rogue countries are dealt with
exhaustively by the International Crisis Group in its 2002 report on the Orao
affair; see http://www.crisisgroup.org/home/index.cfm?id=1247&l=1
497 For instance, the Military-Technical Institute at Potoci near Mostar was transferred
completely to the Milan Blagojević plant at Lučani in western Serbia in 1992 .
498 Financial expert Morten Torkildsen prepared an exhaustive report on this for
the Hague Tribunal, see www .un .org/icty ., see also “Milošević vs Yugoslavia”,
ed . Sonja Biserko, Helsinki Committee, Belgrade 2004, p . 211–253 .
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